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USD / JPY bearish reversal from 105.70 extends to daily lows near 105.00

  • USD / JPY cuts gains on Thursday and falls back to the 105.00 zone
  • The Japanese yen recovers as market sentiment deteriorates.
  • The decline in US Treasury yields are affecting the demand for the USD.

The US dollar is undergoing a downward correction against the Japanese yen on Thursday after rising more than 2% earlier this week. Attempts to the upside have lost steam at 105.65 and the USD/JPY it is retreating to levels above 105.00.

Yen recovers as risk appetite fades

The Japanese safe-haven yen is cutting losses on Thursday with excitement over the progress of a COVID-19 vaccine waning. The market has turned its attention to rising coronavirus infections in the US and Europe, assuming the fact that the vaccine won’t be ready soon enough to avoid a very challenging winter.

Equity markets have been trading in the red, reflecting more cautious sentiment, with the major Wall Street indices registering declines between 0.7% and 1.2%. Similarly, US Treasury yields are falling from multi-month highs with the 10-year Treasury yield at 0.91% after peaking at 0.97% earlier this year. week, what weighs on the dollar.

USD / JPY continues to target 106.00 – UOB

According to the UOB currency analysis team, the pair remains biased to the upside and on track to test the 106.10 resistance level: “There is room for the current strong advance in the USD to test the main resistance at 106.10. At this stage, the chances of a sustained increase above this level are not high. On the downside, a breakout of 104.40 (previously ‘strong support’ level at 104.00) would indicate that the USD is not ready for 106.10 “.

Credits: Forex Street

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